We're short oil at $51 (/CL).
The API report last night showed a 1.5Mb build in Oil, a 1.7Mb build in Gasoline and a 5.5Mb build in Distillates and, if that's matched on the EIA report at 10:30 this morning – you can say goodbye to $50, which would be a $1,000 per contract gain in the Futures.
It's all starting to fall apart and that includes Trump's plan to be President. I'm not going to get into it but it's best to read the UK's Guardian's article for an outsider's perspective on this mess (and this follow up timeline) and, if you dare, to read the actual intelligence briefing on Trump's ties to the Kremlin, with it's horrifying details. As noted by Trump spokeswoman Kellyanne Conway last night, these are "unverified" claims and that's true because, if they were verified, a lot of people would be going to jail for espionage!
Now we know why Hillary said she is going to the inauguration next week – she still might end up being the one who's sworn in! While it's doubtful that still-President Obama will declare martial law and delay the transition until a full investigation is completed – it's not impossible at this point and markets really don't like political uncertainty – especially in a leading World power.
That's all I'll say about it for fear of being censored for political commentary and then you would miss out on our oil call and other hedging ideas as well as a repeat of our main idea to make sure you have plenty of CASH!!! to ride out what could be a major black swan crisis.
We're back to shorting the Russell Futures (/TF) below the 1,370 line (tight stops above) and we expect a rising Dollar (already 102.50) to put downward pressure on the indexes as well as commodities but it's going to be wild and we probably won't be playing those. If you want an option play to hedge with the Russell, I suggest the following using the Ultra-Short ETF (TZA):
- Buy 20 TZA March $18 calls for $2.25 ($4,500)
- Sell 20 TZA March $22